In November to January, 1.7 million people were unemployed, up 360,000 in a year.

The employment rate fell 0.3 percentage points in a quarter and 1.5 percentage points over the year to 75%. The ONS said 32.37 million people were employed – down 611,000 in a year.

The monthly figures show that over the past three months, the employment rate was lowest in December and may have increased slightly in January.

Since the onset of the pandemic, the number of people on payrolls has fallen 693,000: Two thirds (63%) of this was made up of people under the age of 25, and 368,000 were workers in the accommodation and food sectors.

But there were small increases in the number of payroll employees in the past three months, according to the ONS. Between January and February this year, the number of people in payroll employment rose by 68,000.

The figures suggest that getting people back into work remains hard, with the number of job vacancies 26.8% lower than a year ago, although this is an improvement on summer last year, when vacancies were down 60% year on year.

The number of people classed as ‘economically inactive’ between November 2020 and January 2021 was 8.71 million, 279,000 more than a year earlier and 108,000 more than the previous quarter. The ONS said this was driven by people who are inactive because they are students, or for ‘other’ reasons.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “You know the bar has been lowered when the fact that things are getting worse more slowly feels like good news. The rise in unemployment was lower, and after months of falling, employment may have actually risen slightly during January. This is especially good news given the fact that we spent the vast majority of the month in lockdown, with all but the essentials closed for the duration.

“The furlough extension announced in the Budget has given many employers the shot in the arm they needed to keep staff on. At the end of January, 4.7 million people were on furlough, the highest number in six months, so the security of knowing that some level of state support is on offer until September will mean both employers and their employees can sleep more soundly.”

Jack Kennedy, UK economist at job site Indeed, said: “With the unemployment rate easing back and the number of payrolled employees rising for three months in a row, there are some green shoots in this data.

“A year on from the day a shellshocked prime minister declared the first national lockdown, Britain’s labour market is still reeling. Nearly 700,000 fewer people are in work than were at this time last year, and the toll among under 25s has been nothing short of brutal – they account for 60% of those losing their jobs.

“For those looking for a new job now, competition in many sectors is intense. The ONS data shows that between December and February there were 601,000 vacancies across the UK, and that new jobs were being created at an ever-slower pace.”